US consumer confidence has plummeted to a nearly five-year low, largely due to the still-unknown, long-term ripple effects of tariffs. Because consumers are just starting to see how rising tariff rates will impact their wallets, they’re increasingly prioritizing value. Typically, the definition of “value” varies depending on the emotional, psychological, and economic state of each individual. But in the current economic climate, price is synonymous with the term, especially through a retail lens.

55% of consumers plan to prioritize products with the lowest price when shopping in the coming months.

As a result, consumers, even Gen Zers, are gravitating towards retail destinations that check the price box. But that doesn’t mean they’re not looking for something more. They’re also looking for retailers that deliver different types of value in their own distinct ways, whether that be digital integration, merchandise assortment, or adjacent service offerings.

Coupled this with the fact that younger consumers are moving to suburban, even rural areas at higher rates, and warehouse clubs are perfectly positioned to capitalize on tariff turmoil.

In 2024, Warehouse Clubs and Supercenters generated $769.9 billion in revenue with an annual growth rate of 5.5% over the preceding three years.

“Looking at the last two years, warehouse clubs stand out as a clear winner in overall retail,” said R.J. Hottovy, Head of Analytical Research at Placer.ai. “We see it in total visits. We see it in frequency, which is improving. We see it in gas station visits.”

With this Category Deep Dive, we’ll explore: 

• How evolving consumer behaviors and migration paths are driving the growth of warehouse clubs
• Which organizations are winning in revenue, store count, and member penetration
• Key differentiators and competitive levers being pulled to drive member acquisition and retention

Social and Behavioral Shifts Create Big (Box) Opportunities

In the world of brick-and-mortar retail, being where your customers are is half the battle. Costco, BJ’s, and Sam’s Club have a distinct advantage in this area, given their expansive store presence. However, there are other supporting dynamics at play: 

‍Consumers are trading down.

75% of consumers said they traded down to more cost-effective brands in Q1 2025. These behaviors are increasingly common for household essentials, like paper goods. In fact, 33% of club members buy these staples exclusively at these destinations.

Younger shoppers are moving to the ‘burbs (and beyond). ‍

Census data has revealed that young adults are migrating from metro areas to suburban and rural areas at rapid rates. Gen Z and even younger millennials are moving to these towns and cities, looking to build a life. That means establishing new living (and spending) patterns. Gen Z consumers will likely buy freshly prepared food on almost 90% of their upcoming warehouse club visits.

“Millennials and Gen Zers were more of an urban customer, and then they moved to suburban and even rural areas,” Hottovy explained. “There’s a pretty good correlation with that happening and the continued growth we’ve seen with warehouse clubs.”

Convenience is just as important as financial value.   ‍

For more than half of current club members, destinations like Costco, BJ’s, and Sam’s Club “offer the best value for their money.” However, for 41% of consumers, having a one-stop shopping destination is a top reason for visiting these stores, with a third of all members visiting stores two or three times a month.

All of these dynamics together validate the value of ongoing expansion and their growing share of wallet. “There are a number of factors at play—the stretching of household budgets is absolutely true, but there’s a lot more than that,” Hottovy said. “Costco, BJ’s, and Sam’s Club have all done a really great job with their merchandising assortment, picking the right items that get people to come back.”

As a result, all three warehouse clubs are putting their growth plans into play. Costco recently announced international expansion plans in Japan and Australia. But Sam’s Club has a particularly aggressive strategy in place for the US expansion: the division of Walmart plans to open 15 stores per year and renovate all of its approximately 600 locations in the US. With these fleet enhancements, Sam’s Club hopes to double its membership pool over the next eight to 10 years.

Which Warehouse Club is Winning?

Costco, BJs, and Sam’s Club are all benefiting from consumers’ heightened focus on value and desire to simplify their shopping journeys. In fact, according to Placer.ai research, they collectively saw an uptick in traffic year over year.

Executive commentary paints a similar picture. In an interview with CNBC, Sam’s Club CEO Chris Nicolas said: 

“In times of plenty, we do well. But in tough times, we do really well.”

Bob Eddy, Chairman and CEO of BJ’s, shared similar sentiments, indicating that while there are underlying concerns about tariffs and the economy, the essence of their category rests on financial value—and they’re well-positioned to provide it:

“We are a value-oriented player, and certainly in times like these, value is paramount. Everybody wants to get quality products at a great price. The club channel is a fantastic place to do that.”

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While the category is seeing growth as a whole, is one particular player inching ahead of the pack? In terms of overall visit duration, Costco is averaging significantly higher month over month. However, all these retailers realized similar visit gains during peak holiday shopping months, with the tip of the bell curve peaking in November.

But how does store traffic—and even overall time in-store—tangibly translate to revenue results and competitive standing? Costco has a clear financial lead and also happens to have the highest visit durations of all three players. However, the retailer also has more locations. With more stores comes more members, which leads to greater overall revenue.

It is important to note, though, that all three players are recognizing revenue gains year over year, giving the warehouse club category a confident position amid economic uncertainty.

Clear Value Props Come to the Forefront

Costco Leads in Cultural Connection

‍Costco’s depth of inventory is a clear draw, with its Kirkland’s Signature brand being a centerpiece of the entire experience. The value and impact of the private-label brand isn’t just tethered to price; it’s tied to consumers’ deep connection (and loyalty) to the brand. Consumers are snatching up Kirkland logo crewnecks and sliders, wearing them as signals of their savvy status. And with the club’s principled stance of upholding its DEI policies, consumers wearing branded goods signals their cultural and political support. But that cultural alignment goes far beyond DEI. For example, the retailer committing to keeping its hot dog at $1.50 while other retailers jacked up prices showed its commitment to the consumer; even to America itself.

"Costco represents the American dream probably better than any other institution. It is Americanism. It is American thinking pushed out through the world. It is the Michael Jackson of now, it is the blue jeans of now... it is actually America in the world."
- Brian Lange, Future Commerce

Costco also is a clear leader in adjacent products and services, with vacations and cruises being a draw for today’s experience-driven consumer, Placer.ai’s Hottovy noted. “Costco does a really great job on their site, particularly for these more service-led offerings. We talk about products, the things in stores, but vacations and the service aspect of the online platform has certainly been a benefit.” 

READ MORE: Costco and the New American Imperialism

BJ’s Bets Big on Fresh‍

Although BJ’s is the smallest warehouse club, it is on the path to tackling its very big goals. In the National Retail Federation’s latest State of Retail & the Consumer event, Eddy of BJ’s, reported strong growth: the company has grown 60% since the pandemic and currently has 7.5 million members, many of whom are embracing its Fresh 2.0 strategy, which truly puts the company’s fresh assortment at the center of the customer experience.

These “fresh” shoppers visit stores at least once a week on average, and have nearly 30% greater basket sizes per trip than those who do not engage with fresh items.

“Our perishables business has been on fire in the last couple of years..we’re putting great quality products on the floor, in front of the people at spectacular prices,” Eddy said. “[Fresh 2.0] is built on the simple thought that folks that buy produce, meat, bakery, and dairy from us are our best members. They interact around the club. They shop the most, they show up the most, and they renew their memberships the most.” ‍

Sam’s Club Thrives with Digital Innovation ‍

Sam’s Club, meanwhile, is tapping into the digital roots of its owner to compete and differentiate. Although all retailers have invested heavily in digital offerings like retail media networks, mobile apps, and omnichannel fulfillment offerings, Sam’s Club is doubling down on the digitally integrated in-store experience.

In October 2024, it opened a new location that displays online-only items, has more real estate for eCommerce fulfillment via curbside pickup, and a Scan & Go app that eliminates overwhelming lines and allows customers to ring up purchases as they venture through the store. This test location hints at the future of Sam’s Club, and the retailer will undoubtedly test these capabilities as stores are opened and refurbished.

“It’s kind of the physical manifestation of a journey we’re trying to go on as a company,” Nicholas told CNBC. “The idea is that over time, we will be 100% digital engagement as a business, and you’ve got to prove that things work before you scale them.”

Winning in the Value-Driven Era 

In the current climate, tariffs are the most daunting weight on retailers and consumers alike. Although warehouse clubs clearly benefit from their price and value-driven focus, consumers have adapted, and will continue to adapt, their grocery shopping behaviors to ensure they’re getting the best deals.

Back in 2023, when inflation threats reached their peak, consumers began to visit more food retailers in a given week. “Maybe you were going to more grocery stores or visiting new stores for the first time,” Hottovy explained. “Maybe you picked up a warehouse club membership and were going to convenience and dollar stores a bit more.”

This shift has continued. While consumers’ visit frequency has increased over time, the overall amount of time and spend per visit has gone down. Consumers have settled into these new patterns and built new routines. But with economic value being the foundation of the category itself, warehouse clubs have been able to withstand, even thrive, amid these conditions. 

In fact, Costco, BJ’s, and Sam’s Club will only be able to further benefit, driving revenue growth and market share, when they add new products, proprietary tech-driven experiences, and other services into their own distinct value equations.

WHAT WE'RE WATCHING

1. How the demographics and psychographics of warehouse club shoppers will evolve as they begin to actually feel the impact of tariffs.
   
   
2. How Costco’s market value, and overall customer loyalty, will continue to strengthen as it plants a firm stance on DEI.
   
   
3. Which private-label brands will come to the forefront as consumers continue to seek quality and value.
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4. The role that tech innovation and operational excellence will play in establishing clear differentiation in the customer experience.